What is the law on overpayment?

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What is the law on overpayment?

My husband got a bonus from his work. The next week His job told him that he was paid too much for his bonus and would have to pay about half of it back. My husband agreed and told them that he would like to see how much they say he owes and a repayment plan before they could take the money. They did not provide that to him and took his entire check making it so part of our insurance payment want paid. This is in Michigan.

Asked on October 28, 2016 under Employment Labor Law, Michigan

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

The fact is that courts disfavor what is known as an "unjust enrichment", which is what this would be if your husband fails to pay back the over payment. In other words, if his former employer sues him, then it would probably win a judgement against him. The fact is that he was not entitled to this extra bonus money; he did nothing to earn it. And think about it, if he had been incorrectly underpaid he would be entitled to be  the shortaage. So now tht he's been mistakenly overpaid, his ex-employer is entitled to repayment of the excess.


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